Have a productive week!
Have a productive week!
The Consumer Sentiment Index for early October was released This Week in Real Estate, reaching its highest level since the start of 2004. Below are a few highlights from the second week of October that influence our business:
* Lot Values Stable at Record High. Single-family lot prices remained at record high levels in 2016, with half of the lots priced at or above $45,000. According to NAHB’s analysis of the Census Bureau’s Survey of Construction (SOC) data, the median lot value reached $45,000 for the first time in 2015 exceeding the previous record of $43,000 reached in 2006. The Pacific division where densities are high and developed land is scarce has the smallest lots. However, high regulatory costs push the median lot value to $78,900, the second most expensive value in the nation. The lot values here are fast approaching the housing boom levels, when half of the lots were priced at above $82,000. The Pacific division lots also stand out for being most expensive in the nation in terms of per acre costs.
Full Story… http://eyeonhousing.org/2017/10/lot-values-remain-record-high-in-2016/
* Consumer Confidence Soars to Highest Level Since 2004. Consumer confidence crushed expectations in October, flying by a seven-month high hit in August. The consumer sentiment index, a survey of consumers by The University of Michigan, rose to 101.1 in October, far ahead of the 95 economists polled by Reuters anticipated. “Consumer sentiment surged in early October, reaching its highest level since the start of 2004,” Richard Curtin, chief economist for the Surveys of Consumers, said in a statement. Curtin noted that current trends indicated consumer spending continuing to expand through the middle of next year. He says, if that pace continues, it would mark the second longest expansion period since the mid-1800s. The economist says October’s numbers reflect “an unmistakable sense among consumers that economic prospects are now about as good as could be expected.”
Full Story… https://www.cnbc.com/2017/10/13/october-us-consumer-sentiment.html?__source=mnd%7Cnews%7C&par=mnd
* Serious Delinquency Rate for Home Loans Holds Steady at a Near 10-Year Low. CoreLogic released its month Loan Performance Insights Report on Tuesday which shows that, nationally, 4.6 percent of mortgages were in some stage of delinquency (30 days or more past due including those in foreclosure) in July 2017. This represents a 0.9 percentage point year-over-year decline in the overall delinquency rate compared with July 2016 when it was 5.5 percent. As of July 2017, the foreclosure inventory rate, which measures the share of mortgages in some stage of the foreclosure process, was 0.7 percent, down from 0.9 percent in July 2016 and the lowest since the rate was also 0.7 percent in July 2007. “While the U.S. foreclosure rate remains at a 10-year low as of July, the rate across the 100 largest metro areas varies from 0.1 percent in Denver to 2.2 percent in New York,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Likewise, the national serious delinquency rate remains at 1.9 percent, unchanged from June, and when analyzed across the 100 largest metros, rates vary from 0.6 percent in Denver to 4.1 percent in New York.”
Full Story… http://www.corelogic.com/about-us/news/corelogic-reports-serious-delinquency-rate-for-home-loans-holds-steady-at-a-near-10-year-low.aspx
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ATTOM Data Solutions released it’s Q3 Home Affordability Index This Week in Real Estate concluding that the index reached it’s lowest point since Q3 2008. Below are a few highlights from the first week of October that influence our business:
* Home Affordability Improves in 60% of U.S. Markets in Q3 2017 Compared to Previous Quarter. ATTOM Data Solutions released its Q3 2017 U.S. Home Affordability Index Thursday, which shows that home affordability in the third quarter improved compared to the previous quarter in 60 percent of 406 U.S. counties analyzed in the report — although affordability was still worse off than a year ago in 79 percent of those counties. The national home affordability index was 100 in the third quarter of 2017, the lowest national affordability index since Q3 2008, when the index was 86. An index of 100 means the share of average wages needed to buy a median-priced home nationwide in Q3 2017 is on par with historic averages (see full methodology below). “Falling interest rates in the third quarter provided enough of a cushion to counteract rising home prices in most U.S. markets and provide at least some temporary relief for the home affordability crunch,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “More sustainable relief for the affordability crunch, however, will need to be some combination of slowing home price appreciation and accelerating wage growth. Wage growth is outpacing home price growth in about half of all local markets so far this year, an indication that a more sustainable affordability pattern is taking shape in more local markets.”
Full Story… https://www.attomdata.com/news/affordability/q3-2017-u-s-home-affordability-index/
* Fastest Growing Cities in America. Frisco is the fastest-growing city in America. No, not THAT Frisco with the incessant fog and Golden Gate Bridge. The Dallas suburb scored No. 1 on WalletHub’s list of fastest-growing cities in America due to its rapid job and population growth. To compile the ranking, WalletHub analysts compared 515 cities of varying population sizes based on 15 key measures of both growth and decline, such as population, unemployment rate and regional GDP per capita over a period of seven years. WalletHub’s10 fastest-growing cities in America: (1) Frisco, TX, (2) Kent, WA, (3) Lehigh Acres, FL, (4) Meridian, ID, (5) Midland, TX, (6) McKinney, TX, (7) Fort Meyers, FL, (8) Bend, OR, (9) Austin, TX and (10) Pleasanton, CA.
Full Story… http://www.marketwatch.com/story/these-are-the-fastest-growing-cities-in-america-2017-10-03?dist=realestate
* Lot Size is at a New Record Low. The median lot size of a new single-family detached home sold in 2016 stands at 8,562 square feet, or just under one-fifth of an acre. This is a new record low and a small decline since 2015, when the median lot size fell under 8,600 square feet for the first time since Census Bureau’s Survey of Construction (SOC) started tracking the series for single-family detached homes. While nation’s lots are getting smaller on average, the regional differences in lot sizes persist. Looking at single-family detached speculatively built (or spec) homes started in 2016, the median lot size in New England is almost twice as large as the national median and exceeds a third of an acre. The East South Central Division is second on the list with the median lot occupying just slightly less than a third of an acre (0.3 acres). The Pacific division where densities are high and developed land is scarce has the smallest lots, with half of the lots being under 0.15 acres.
Full Story… http://eyeonhousing.org/2017/10/lot-size-is-at-a-new-record-low/
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This Week in Real Estate, according to the recently released Financial Accounts of the United States, published by the Federal Reserve Board of Governors, the market value of owner-occupied real estate reached $23.8 trillion in the second quarter, up $7.8 trillion since 2011. Below are a few highlights from the last week of September that influence our business:
* Homeowner’s Equity Continues to Improve. Households’ owner-occupied real estate increased to $23.8 trillion in the second quarter of 2017, $1.597 billion more than the second quarter of 2016. Total home mortgage debt outstanding stands at $9.9 trillion, $250 billion more than the same period of 2016. Since 2011, the market value of households’ real estate has rebounded. In the second quarter of 2017, it was $23.8 trillion, $7.8 trillion higher than six years ago. Mortgage debt barely changed over the past six years and has remained at $9.9 trillion. Thus, the value of owners’ equity in real estate rose by $7.8 trillion reflecting the increase in the market value of households’ real estate.
Full Story… http://eyeonhousing.org/2017/09/homeowners-equity-continues-to-improve/
* Green Home Building Continues to Gain Traction. Green construction is rapidly gaining traction among both single family and multifamily home builders, according to new research published in the Green Multifamily and Single Family Homes 2017 SmartMarket Brief. At least one third of single family and multifamily builders who were surveyed said that green building is a significant portion of their overall activity (more than 60 percent of their portfolio). By 2022, this number should increase to nearly one half in both the single family and multifamily sectors. Within this group, nearly 30 percent of multifamily builders fall into the category of “dedicated” green builders (more than 90 percent of their portfolio). On the single family side, the percentage of “dedicated” green builders is nearly 20 percent, but that share is expected to grow sizably by 2022. Increasing energy efficiency continues to be the most common method of improving the performance of a green home, followed by creating a healthy indoor living environment.
Full Story… http://www.prnewswire.com/news-releases/study-finds-green-home-building-continues-to-gain-traction-300526537.html
* Don’t Give Up, Buyers: More Newly Constructed Homes Are On The Way. Permits, the best indicator of how many newly built homes will rise over the next few months, were up in August, according to the seasonally adjusted numbers in the latest residential sales report jointly released by the U.S. Census Bureau and U.S. Department of Housing and Urban Development. Builders were issued 5.7% more permits from July to August and 8.3% more than August 2016. The bulk of those increased permits were to put up condo and apartment buildings with five or more units. Meanwhile, the number of permits for those perennially in-demand single-family homes—the typical standalone abodes that usually come with yards— dipped 1.5% from July. But they were up 7.7% over August 2016.
Full Story… https://www.realtor.com/news/real-estate-news/new-home-construction-august-2017/
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While America’s largest living generation, Millennials, are delaying their home-buying plans by a median seven years as a result of their student loan debt, according to a report released by the National Association of Realtors, single-family starts and single-family permits are up 9% and nearly 11% respectively year-over-year and owners of mortgaged U.S. properties realized an aggregate gain of $766 billion in additional equity between second quarter 2016 and the same quarter this year. Below are a few highlights from the third week of September that influence our business:
* Home Equity Increases, Average Gains Vary Wildly. Rising home prices continue to fuel fast growth in household equity. CoreLogic said on Thursday that owners of mortgaged properties in the U.S. (roughly 63 percent of all homes) gained an aggregate of $766 billion in additional equity between the second quarter of 2016 and the same quarter this year. This is an increase of 10.6 percent in nationwide equity over that period. The average increase for each homeowner was just under $13,000, but the distribution is far from even across the states. A few states in the west, notably Washington, Hawaii, and California, with equity gains of $40,000, $33,000 and $30,000 respectively, have offset much poorer performances elsewhere. Homeowners in Alaska saw their equity decline by an average of $1,200 and Delaware homeowners also posted a tiny loss. On the other side of the ledger, the number of underwater homes declined by 10 percent from the first quarter of 2017, to 2.8 million properties, or 5.4 percent of mortgaged homes. A year earlier 7.1 percent of mortgaged homes had been underwater, a total of 3.6 million properties. This is an annual decrease of 22 percent. Negative equity had peaked at 26 percent of mortgaged properties in the fourth quarter of 2009. “Over the last 12 months, approximately 750,000 borrowers achieved positive equity,” said Dr. Frank Nothaft, chief economist for CoreLogic. “This means that mortgage risk continues to decline and, given the continued strength in home prices, CoreLogic expects home equity to rise steadily over the next year.” “Homeowner equity reached $8 trillion in the second quarter of 2017, which is more than double the level just five years ago,” said Frank Martell, president and CEO of CoreLogic. “The rapid rise in homeowner equity not only reduces mortgage risk, but also supports consumer spending and economic growth.”
Full Story… http://www.mortgagenewsdaily.com/09212017_corelogic_negative_equity.asp
* Single Family Starts Post Slight Gain in August. The pace of single-family starts posted a slight gain in August, albeit over downwardly revised estimates of the rate of July construction. Nonetheless, the three-month moving average for single-family starts is at a post-recession high of 849,000 as the gradual recovery in home building continues. Total starts declined almost 1% in August to a 1.180 million seasonally adjusted annual rate, according to the joint data release from the Census Bureau and HUD. The headline decline was due to multifamily production decreases. Single-family starts increased, rising slightly to an 851,000 seasonally adjusted rate in August. Single-family starts are up almost 9% year-to-date compared to 2016 as limited existing inventory and solid builder confidence make for positive market conditions. Single-family permits declined slightly in August, falling 1.5%. However, on a year-to-date basis, single-family permits are nearly 11% higher compared to this time in 2016, representing an additional 54,400 permits for a total of 564,000 thus far this year. These data are consistent with recent trends in the NAHB/Wells Fargo measure of single-family builder confidence and NAHB’s forecast of modest single-family construction growth in 2017. However, we can expect volatility ahead, as the counties affected by Hurricanes Harvey and Irma represent about 14% of national single-family production. With respect to housing’s economic impact, 56% of homes under construction in August were multifamily (610,000). As noted in the graph above, with recent production declines for apartments, the current count of multifamily units is effectively unchanged from a year ago. There were 472,000 single-family units under construction, a gain of 11% from this time in 2016.
Full Story… http://eyeonhousing.org/2017/09/single-family-starts-post-slight-gain/
* Student Debt Delaying Millennial Homeownership by 7 Years. College debt is having a compounding effect on how millennials perceive and plan for homeownership. Eighty-three percent of millennials in a recently released report by the National Association of REALTORS® (NAR) say they are delaying their home-buying plans by a median seven years as a result of their student loan debt. Twenty percent of the millennials surveyed in the study are homeowners; 80 percent are not. The typical millennial homeowner is burdened by $41,200 in student debt, and earning $38,800 annually. Homeownership is not the only casualty of student debt—millennials are also postponing career changes, children, marriage and retirement savings, the study shows. Forty-one percent of millennials have put off marriage; 61 percent have skipped a retirement savings payment; and 86 percent have stayed in an unsatisfying job, or taken on a second job or one outside of their field, as a result of student debt.
Full Story… https://www.nar.realtor/news-releases/2017/09/student-debt-delaying-millennial-homeownership-by-7-years
As the summer selling season comes to a close, Fannie Mae released it’s Home Purchase Sentiment Index This Week in Real Estate. The findings show August was just below the all-time high set earlier this year, largely fueled by consumers attitude towards now being a good time to sell. Below are a few highlights from the second week of September that influence our business:
* Overall Housing Confidence Up. The Fannie Mae Home Purchase Sentiment Index® (HPSI) increased 1.2 points in August to 88.0, just below the all-time high set in June. The rise can be attributed primarily to increases in two of the six HPSI components: the good time to sell component and the mortgage rates expectations component. The net share who reported that now is a good time to sell a home rose 8 percentage points in August and is now up 21 percentage points compared to the same period last year. Meanwhile, the net share who said it’s a good time to buy fell 5 percentage points in July and is down 16 percentage points year-over-year. Respondents continue to cite high home prices as the most important reason behind the bad time to buy and good time to sell indicators. “In the early stages of the economic expansion, home selling sentiment trailed home buying sentiment by a significant margin. The reverse is true today,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The net good time to sell share is now double the net good time to buy share, with record high percentages of consumers citing home prices as the primary reason for both perceptions. Such a sizable gap between selling and buying sentiment, if it persists, could weigh on the housing market through the rest of the year.”
Full Story… http://www.fanniemae.com/portal/research-insights/surveys/national-housing-survey.html
* Home Value Index Growth Slows in August. Appraisals continued to lag homeowner expectations in August, although the difference between appraiser and owner opinions narrowed, according to Quicken Loans’ National Home Price Perception Index (HPPI), out Tuesday. The HPPI showed that appraised values were 1.35% lower than home owners’ expectations in August. This is compared to July when there was a 1.55% difference. Regionally, value perceptions vary widely across the country, from home values being 3% higher than home owners estimated in the West, to 3% lower than expected in the Midwest and Northeast.
Full Story… http://www.builderonline.com/money/home-value-index-growth-slows-in-august_o
* Custom and Spec Home Market Shares in 2016. NAHB’s analysis of the most recent Census Bureau’s Survey of Construction (SOC) shows that custom home building registered declining market shares across most US regions in 2016. The sharpest drop in the custom home share of new single-family starts took place in the East South Central division, from 35% to 27%. In the Mountain division, the custom home share of new single-family starts was lowest in the nation but remained stable (14%). The Pacific division was the only US division registering an increase in the custom home share (from 14% to 18%). While nationally about one in five homes started in 2016 was a custom home, the shares varied widely across the US divisions. The New England and East North Central divisions stand out for registering the highest shares of starts supervised by contractors or owners – close to 39%, the Middle Atlantic division is next at close to 32%, followed by the East South Central division at more than a quarter (27%). At the opposite end of the spectrum are the Western divisions – Mountain and Pacific – and the South Atlantic. Home building here is dominated by spec starts. These divisions registered the highest three spec home shares – 83% in the Mountain and South Atlantic, and 79% in the Pacific.
Full Story… http://eyeonhousing.org/2017/09/custom-and-spec-home-market-shares-in-2016/
Have a productive week!
Have a productive week!
Have a productive week!
As the summer selling season quickly approaches its end, we are setting the stage for the fall cycle with favorable news. With continued home price appreciation, consumer confidence rises to the highest level since the beginning of the year and the 30-year mortgage rate reaches a new 2017 low. Below are a few highlights from the fourth week of August that influence our business:
* Consumer Confidence Rises to Highest Level Since January. Consumers became more confident during the first half of August than at any point since January, according to the Survey of Consumers conducted by the University of Michigan. The Index of Consumer Sentiment jumped 4.5% from last month’s 93.4 to 97.6 at the beginning of August. This is also up 8.7% from 89.8 in August 2016.
“Consumer confidence rose in the first half of August to its highest level since January due to a more positive outlook for the overall economy as well as more favorable personal financial prospects,” Survey of Consumers Chief Economist Richard Curtin said. “The two component indices moved in opposite directions, with the Current Conditions Index falling slightly from its decade peak, and the Expectations Index posting a more substantial rebound,” Curtin said. “As with the overall Sentiment Index, the component indices nearly regained the peak levels recorded earlier in 2017.”
Full Story… https://www.housingwire.com/articles/41042-consumer-confidence-rises-to-highest-level-since-january?eid=322520585&bid=1843653
* Home Prices Jump 6.2% in Second Quarter; Eclipse 2016 High. The national median existing single-family home price in the second quarter was $255,600, which is up 6.2 percent from the second quarter of 2016 ($240,700) and surpasses the third quarter of last year ($241,300) as the new peak quarterly median sales price. The median price during the first quarter increased 6.9 percent from the first quarter of 2016. Single-family home prices last quarter increased in 87 percent of measured markets, with 154 out of 178 metropolitan statistical areas(MSAs) showing sales price gains in the second quarter compared with the second quarter of 2016. Twenty-three areas (13 percent) recorded lower median prices from a year earlier. Total existing-home sales, including single family and condos, slipped 0.9 percent to a seasonally adjusted annual rate of 5.57 million in the second quarter from 5.62 million in the first quarter, but are still 1.6 percent higher than the 5.48 million pace during the second quarter of 2016. In the West, existing-home sales decreased 3.7 percent in the second quarter but are 3.1 percent above a year ago. The median existing single-family home price in the West increased 7.5 percent to $372,400 in the second quarter from the second quarter of 2016.
Full Story… https://www.nar.realtor/news-releases/2017/08/home-prices-jump-62-percent-in-second-quarter-eclipse-2016-high
* 30-Year Mortgage Rate Hits 2017 Low. Mortgage rates decreased for the fourth consecutive week and the 30-year mortgage hit a new low for 2017, according to Freddie Mac’s Primary Mortgage Market Survey. “The 30-year mortgage rate also declined for the fourth consecutive week, dropping three basis points to a new year-to- date low of 3.86%,” Freddie Mac Chief Economist Sean Becketti said. The 30-year fixed-rate mortgage dropped to 3.86% for the week ending August 24, 2017. This is down from last week’s 3.89% but up from 3.43% last year. The 15-year FRM held steady at 3.16%, an increase from last year’s 2.74%. The five-year Treasury-indexed hybrid adjustable-rate mortgage increased slightly, hitting 3.17%. This is up from 3.16% last week but down from 2.75% last year. “The 10-year Treasury yield fell six basis points this week amid concerns over lagging inflation,” Becketti said.
Full Story… http://www.freddiemac.com/pmms/
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While default rates are at their lowest level in a decade, builder confidence in the single-family market has surged in August as reported This Week in Real Estate by the National Association of Home Builders. Below are a few highlights from the third week of August that influence our business:
* Builder Confidence Springs Back with Four Point August Jump. Builder confidence in the market for newly-built single-family homes rose four points in August to a level of 68 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). Builder sentiment is being supporting by ongoing job and economic growth, attractive mortgage rates, and growing consumer confidence. The fact that builder confidence has returned to the healthy levels we saw this spring is consistent with the NAHB forecast for a gradual strengthening in the housing market. GDP growth improved in the second quarter, which helped sustain housing demand. However, builders continue to face supply-side challenges, such as lot and labor shortages and rising building material costs. All three HMI components posted gains in August. The component gauging current sales conditions rose four points to 74 while the index charting sales expectations in the next six months jumped five points to 78. Meanwhile, the component measuring buyer traffic increased a single point to 49. Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 48. The West, South and Midwest all remained unchanged at 75, 67 and 66, respectively.
Full Story… http://eyeonhousing.org/2017/08/builder-confidence-springs-back-with-four-point-august-jump/
* S&P/Experian: Mortgage Default Rate at Lowest Level in a Decade. Despite a slight increase in July, the default rate for first mortgage loans still sits at its lowest point in the last 10 years, according to the latest S&P/Experian Consumer Credit Default Indices. In fact, the mortgage default rate for first and second mortgages aren’t too far off from their July 2016 level, as homebuyers get better at paying their mortgage on time. “Default rates for autos and first mortgage loans are at their lowest points in the last ten years, while bank card defaults remain modest,” says David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices.” “Consumers’ use of credit is growing and the level of consumer credit outstanding is at an all-time high. In the year ending June 2017, consumer credit outstanding rose 5.7%, outpacing most spending categories across the economy,” he said. “However, retail sales excluding autos as well as auto sales are down slightly since April, while home sales are little changed in recent months.
Full Story… https://www.housingwire.com/articles/41000-spexperian-mortgage-default-rate-at-lowest-level-in-a-decade?eid=322520585&bid=1839633
* We Are Definitely Not In A Housing Bubble. As home prices continue to rise across the U.S., the dreaded b-word is beginning to be heard in some overheated markets. However, many companies insist that despite the 8.3 million low-income residents who can’t afford their local rent, according to a new study from the U.S. Department of Housing and Urban Development, the housing market is still not in a bubble. The most recent Case Shiller results pointed out the housing market is growing more expensive, however it is not about to repeat the bubble years. The chart below from Bloomberg shows home prices already passed up the 2005 and 2006 levels. “We’re definitely not in a bubble. We have a handful of markets that are frothy and probably have hit an affordability wall of sorts but the fact of the matter is, while prices nominally have surpassed the 2006 peak, we’re not talking about 2006 dollars. We’ve had 9 years of inflation to factor into home prices today…and, in fact, if you really dug into the analysis what you would find is that home prices today have basically recovered to about where they were in 2004,” said Rick Sharga, Executive Vice President at Ten-X.
Full Story… https://www.housingwire.com/articles/40988-charts-ten-x-we-are-definitely-not-in-a-housing-bubble?eid=322520585&bid=1837374
Have a productive week!